Edit
) no-repeat top center;background-size:cover'>

Quick Word on Price Action

June 29, 2012
The EU Summit results are the main driver of the capital markets.   Expectations had rightfully been depressed.  The fact that it appears that Germany and the creditors blinked caught the market leaning the wrong way.  
Secondarily, the softness of the US personal consumption in May and the back month revisions of real PCE (implied too by the GDP …
Quick Word on Price Action Quick Word on Price Action Reviewed by Marc Chandler on June 29, 2012 Rating: 5
Edit

Word of the Day: Sovereignty

June 28, 2012
Here is an under-appreciated irony:  One of the underlying themes of the European summit is the erosion of sovereignty for the sake of integration.  In the US today, the Supreme Court decision on President Obama's national health care program, reinforces if not strengthens the power of the sovereign (in this case, to tax).  The US state may ha…
Word of the Day: Sovereignty Word of the Day: Sovereignty Reviewed by Marc Chandler on June 28, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Great Graphic: Affordable Health Care Act

June 28, 2012
My brilliant and wise beyond her years webmaster decided that the the decision to uphold the Affordable Health Care Act was reason enough for a Great Graphic on the issue.
Here are some more facts and figures from CNN: 49.9 million Americans were uninsured in 2010, roughly 16.3% of the population.7.3 million children (9.8% of all the children in th…
Great Graphic: Affordable Health Care Act Great Graphic: Affordable Health Care Act Reviewed by magonomics on June 28, 2012 Rating: 5
Edit

Europe: Three No's Revisited

June 27, 2012
The EU Summit will feature some growth measures, but little that will boost confidence that European officials will act to arrest the financial crisis.  Even the road map to greater economic and monetary union appears to really be a road map of the road map.  
Concrete proposals may not be formally presented until the end of the year.  Even the g…
Europe: Three No's Revisited Europe: Three No's Revisited Reviewed by Marc Chandler on June 27, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Narrow Ranges Prevail; Waiting for Godot

June 27, 2012
The US dollar is trading in narrow ranges against the major foreign currencies in quiet turnover.  Today's settlement the last for the month, but outside of some related flows, activity is uneventful ahead of the EU summit.  Expectations were marked down at the start of the week and Merkel's colorful comments drove the point home.  
There…
Narrow Ranges Prevail; Waiting for Godot Narrow Ranges Prevail; Waiting for Godot Reviewed by Marc Chandler on June 27, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Why Not To Expect SMP or LTRO from ECB Next Week

June 26, 2012
The ECB meets next Thursday, July 5. Although a few members wanted to cut rates earlier this month, they did not represent a majority. Expectations are running high for some action next week. The ECB did announce last week a relaxation of collateral standards and a liberalization of criteria. We have suggested this should be understood as ju…
Why Not To Expect SMP or LTRO from ECB Next Week Why Not To Expect SMP or LTRO from ECB Next Week Reviewed by Marc Chandler on June 26, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

US, Ireland, and Italy: Quick Survey of House Prices and Sales

June 26, 2012
The recent data suggests the US and Irish housing markets are stabilizing, while news from Italy has been poor.
The April reading from S&P/Case-Shiller showed a 1.9% year-over-year decline in property prices. This is the smallest decline since late 2010 and was a smaller decline than the 2.5% expected by the consensus. New home sales reported…
US, Ireland, and Italy: Quick Survey of House Prices and Sales US, Ireland, and Italy: Quick Survey of House Prices and Sales Reviewed by Marc Chandler on June 26, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Marking Time, Dollar Softer

June 26, 2012
The US dollar is softer against most of the major and emerging market currencies as players await for fresh incentives as month-end and quarter end approaches.  
Of note, the dollar has surrendered more of last week's gains against and has returned to the 20-day moving average around JPY79.25, after finishing last week above its Bollinger Ban…
Marking Time, Dollar Softer Marking Time, Dollar Softer Reviewed by Marc Chandler on June 26, 2012 Rating: 5
Edit

Great Graphic: US Public/Private Employment

June 25, 2012
Here is a Great Graphic from Joe Weisenthal at Business Insider.  It compares the jobs creation in Bush's first term to Obama's first term.  The red line is private sector employment.  The blue line is state government employment.  The green line is local government employment. 
The argument is that while private sector employment snappe…
Great Graphic: US Public/Private Employment Great Graphic: US Public/Private Employment Reviewed by Marc Chandler on June 25, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Thoughts about Mexico's Election and Peso Outlook

June 25, 2012
Mexico holds presidential and congressional elections on July 1.  The polls suggest the PRI will recapture the presidency for the first time since 2000.   Since 2000, the PRI has tried to reinvent itself as a reform party.  It is expected expand its control of the Senate, but it may not secure a majority in the lower house.
PAN, which has control…
Thoughts about Mexico's Election and Peso Outlook Thoughts about Mexico's Election and Peso Outlook Reviewed by Marc Chandler on June 25, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Dollar Bounces Back, Pessimism Persists in Europe

June 25, 2012
The US dollar is broadly firmer, with the recovery of the yen the only main exception. The key fundamental drivers are the recognition that this week’s EU Summit is unlike to resolve the protracted debt crisis and that the Federal Reserve seems restrained compared with the actions of the ECB and BOE. 
Growth and policy concerns have weighed on g…
Dollar Bounces Back, Pessimism Persists in Europe Dollar Bounces Back, Pessimism Persists in Europe Reviewed by Marc Chandler on June 25, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

FX Positioning and Outlook: Correction Over?

June 23, 2012
The upside correction of the major foreign currencies we have been tracking since the disappointing May employment report on June 1, when the euro and Swiss franc posted key reversals, appears to be complete or nearly so.
The latest CFTC Commitment of Traders report for the week ending June 19 showed a large reduction of net short euro, Swiss franc…
FX Positioning and Outlook: Correction Over? FX Positioning and Outlook: Correction Over? Reviewed by Marc Chandler on June 23, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>
CNBC Video Clip: Euro Upside Correction Over CNBC Video Clip: Euro Upside Correction Over Reviewed by Marc Chandler on June 23, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Europe: Jockeying for Position

June 22, 2012
The numerous meetings of European officials is best understood as jockeying for position ahead of heads of state summit at the end of next week. Domestic political considerations are often an under-appreciated factor in the formation of a country's position in international forums.
This is a material point in Germany. Merkel depends on the o…
Europe: Jockeying for Position Europe: Jockeying for Position Reviewed by Marc Chandler on June 22, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Dollar Consolidates Gains

June 22, 2012
The foreign exchange market, and the capital markets more generally, are subdued after several days of dramatic moves.  The attempt to extend yesterday's dollar gains in Asia was limited and seemed to bring in some profit-taking ahead of the weekend.   
The North American session will begin with the major foreign currencies near the highs for…
Dollar Consolidates Gains Dollar Consolidates Gains Reviewed by Marc Chandler on June 22, 2012 Rating: 5
Edit

Thoughts on Spain's Stress Tests and ESM

June 21, 2012
Spanish officials will likely find comfort in the results of the latest stress tests.  They can still feel as if the 100 bln euro line from the EFSF/ESM will be more than sufficient.  In fact, a formal request for the funds may be made within days.  
Recall that the IMF's stress test was based on 4% economic contraction and a 20% decline in p…
Thoughts on Spain's Stress Tests and ESM Thoughts on Spain's Stress Tests and ESM Reviewed by Marc Chandler on June 21, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

What Not to Expect from the European Meetings Today and Friday

June 21, 2012
The Euro group of finance ministers meet today and tomorrow there is a heads of state meeting for Germany, France, Italy and Spain. These meetings should be understood as preparing and positioning for the EU Summit at the end of next week.
Recent comments have shed light on what is not likely to happen. It is unlikely that there will be an agree…
What Not to Expect from the European Meetings Today and Friday What Not to Expect from the European Meetings Today and Friday Reviewed by Marc Chandler on June 21, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Dollar Firm, but Mostly Range Bound

June 21, 2012
The US dollar is somewhat firmer, but still largely confined to recent ranges.  Its strength against the yen is an exception.   The greenback neared JPY80 for the first time since May 23.  The dollar's gains against the yen may be partly a  function of the Fed opting for Operation Twist over QE.   The US-Japan 2-year interest rate differentia…
Dollar Firm, but Mostly Range Bound Dollar Firm, but Mostly Range Bound Reviewed by Marc Chandler on June 21, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Fed Twists and Shouts, but No QE

June 20, 2012
The Federal Reserve signaled disappointment with the economic performance and announced an extension of Operations Twist that was set to be completed this month. It will do another $267 bln selling of short-end and buying of the long end through the remainder of the year. There was no MBS twist on twist, so to speak
The Federal Reserve acknowle…
Fed Twists and Shouts, but No QE Fed Twists and Shouts, but No QE Reviewed by Marc Chandler on June 20, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Marking Time Ahead FOMC

June 20, 2012
The US dollar is little changed as the foreign exchange market awaits the outcome of the FOMC meeting and further developments in Europe, where a Greek government may be announced.  Most of the major currencies are trading within yesterday's ranges.  Global equity markets are higher.  
Of note the MSCI Asia-Pacific Index gained 1%, despite lo…
Marking Time Ahead FOMC Marking Time Ahead FOMC Reviewed by Marc Chandler on June 20, 2012 Rating: 5
Edit

Why 100 bln euros for Spain Won't be Enough

June 19, 2012
In the five sessions through today, the Greek stock market has rallied 25%. Equity traders seem to have anticipated the election outcome. A new government is not yet in place, but many are still confident it will be announced in the very near-term (today or tomorrow). At the same time, European officials seem to be much more supportive than th…
Why 100 bln euros for Spain Won't be Enough Why 100 bln euros for Spain Won't be Enough Reviewed by Marc Chandler on June 19, 2012 Rating: 5
Edit
Great Graphic: Understanding the Europe Crisis Now Great Graphic: Understanding the Europe Crisis Now Reviewed by magonomics on June 19, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Yahoo Finance Video: Greek Election and the Way Forward

June 19, 2012
Unlike many observers, I argue that the only way truly forward is greater integration.  Disintegration of monetary union would be ruinous of both creditor and debtor countries.  EMU is the culmination of the post-WWII strategy in Europe that sought integration on various levels and in numerous spheres as a way to bring peace to the war-ridden pen…
Yahoo Finance Video: Greek Election and the Way Forward Yahoo Finance Video: Greek Election and the Way Forward Reviewed by Marc Chandler on June 19, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Calmer Markets, No Resolution

June 19, 2012
The global capital markets are calmer today, but there has been no resolution of key outstanding issues.  There is still no agreement over the configuration of a new Greek government.  The full extent of Spain's banking needs are still not known and there is speculation that a full-blown assistance package is needed.  Peripheral bond yields a…
Calmer Markets, No Resolution Calmer Markets, No Resolution Reviewed by Marc Chandler on June 19, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Quick Note on Price Action: Close is Important

June 18, 2012
The euro reached its highest level in four weeks in Asia today, but how it closes the North American session may be more important.  
At the start of June, the euro and Swiss franc posted key outside up days following the poor US employment data.  We recognized it as such here and our confidence grew as follow through action materialized. Our wee…
Quick Note on Price Action: Close is Important Quick Note on Price Action: Close is Important Reviewed by Marc Chandler on June 18, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Euro Struggling, Deja Vu All Over Again, Except...

June 18, 2012
In price action eerily reminiscent of last week's reaction the the EU's offer of a 100 bln euro line for Spanish banks, the euro rallied initially and subsequently gave it all back plus some.  The euro's advance carried it to almost $1.2750 and has now fallen to a low of about $1.2580 in the NY morning.   The other major currencies ar…
Euro Struggling, Deja Vu All Over Again, Except... Euro Struggling, Deja Vu All Over Again, Except... Reviewed by Marc Chandler on June 18, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Monday Funday: Jon Stewart Nails It

June 18, 2012
For years my brilliant webmaster said if she were to have father issues resulting in crushes on older men they would be directed at the witty and wise Jon Stewart. (Then she learned he had a daughter by the same name and it got creepy.) In honor of a belated fathers day here are two great clips from last week:


and part two...


Monday Funday: Jon Stewart Nails It Monday Funday: Jon Stewart Nails It Reviewed by magonomics on June 18, 2012 Rating: 5
Edit

Great Graphic: Target2 and German Bank Claims

June 18, 2012
Here is a Great Graphic that Felix Salmon at Reuters picked up from Jonathan Carmel of Camel Asset Management.  It shows that as German banks have reduced their exposures to the periphery in Europe, the Target2 exposures of the BBK have grown.  
The two seem to be independent.  The German banks have consciously decided to reduce exposure to the p…
Great Graphic: Target2 and German Bank Claims Great Graphic: Target2 and German Bank Claims Reviewed by Marc Chandler on June 18, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Four Observations to Start the Week

June 18, 2012
The US dollar initially sold off on news that the New Democracy Party came in first place in the Greek elections, but has since recovered as the market recognizes that the euro area problems remain profound. Spain is still on the forefront and ahead of this week’s bill and bond auctions, the Spanish 10-year yield is up through 7%. Italian bond…
Four Observations to Start the Week Four Observations to Start the Week Reviewed by Marc Chandler on June 18, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Video Explaining Risk of Reversible Union

June 17, 2012
Entertaining short piece that captures the challenges that face Greece and Europe.  It comes via the Economist.  It underscores a point we made:  European officials did themselves a disservice by even suggesting that monetary union is reversible.  See here:

Video Explaining Risk of Reversible Union Video Explaining Risk of Reversible Union Reviewed by Marc Chandler on June 17, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

FX Positioning and Technical Outlook on Eve of Greek Election

June 16, 2012
Between the Greek and French elections, the G20 meeting and an FOMC meeting that follows a string of disappointing data, next week promises to be among the most significant from a fundamental point of view as one can imagine. At the same time,  speculative positioning and the technical condition of the market offer an alternative (sometimes compl…
FX Positioning and Technical Outlook on Eve of Greek Election FX Positioning and Technical Outlook on Eve of Greek Election Reviewed by Marc Chandler on June 16, 2012 Rating: 5
Edit

FT Interview on Greece and Europe

June 15, 2012
Yesterday I originally posted a link to this interview I did for Financial Times. Alas I am not as technologically savvy as my brilliant webmaster. So here is the actual video:

FT Interview on Greece and Europe FT Interview on Greece and Europe Reviewed by magonomics on June 15, 2012 Rating: 5
Edit

Great Graphic: Target2 Imbalances

June 15, 2012
Here is a Great Graphic of Target2 imbalances.  Target2 is the real time payments settlement system in Europe.  I stumbled on it looking for something else and there was no source to identify its origin.  
Target2 facilities cross-border movement of capital Europe.  Local banks go through their central bank, while the central bank itself has an a…
Great Graphic: Target2 Imbalances Great Graphic: Target2 Imbalances Reviewed by Marc Chandler on June 15, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

UK Eases, Greek and French Elections, US Data

June 15, 2012
The US dollar somewhat firmer in a relatively subdued foreign exchange market as last minute position adjustments are made in waning hours ahead of what many expect to be a key weekend with Greek and French elections.  Greek exit polls are expected to begin around midday (ET) with official results out prior to the opening of the Asian session Mond…
UK Eases, Greek and French Elections, US Data UK Eases, Greek and French Elections, US Data Reviewed by Marc Chandler on June 15, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Sentiment Turning on Germany?

June 14, 2012
It has been a difficult week for Germany.  Instead of attributing the intensification of the crisis to the debtors, some officials and observers, as well as the media, are blaming Germany for not opening its purse more.  Germany, we are told, is isolated, but it is not.  The key division in Europe is creditor and debtor.  For much of its resistanc…
Sentiment Turning on Germany? Sentiment Turning on Germany? Reviewed by Marc Chandler on June 14, 2012 Rating: 5
Edit

FT Video Interview on Greece and Europe

June 14, 2012
Here is the link to a video interview I did earlier this week with John Auther's of the Financial Times.  Authers' pens the Long View column at the FT.   The interview gave me an opportunity to highlight my some what non-consensus views on Greece.  
First and foremost, contrary to what many observers have suggested and what the German fin…
FT Video Interview on Greece and Europe FT Video Interview on Greece and Europe Reviewed by Marc Chandler on June 14, 2012 Rating: 5
Edit

Great Graphic: US Per Capita GDP--the Big Picture

June 14, 2012
Here is a Great Graphicputting US GDP growth in a different context then we are accustomed to seeing it.  It comes from Professors William Easterly and Yaw Nyarko-led Development Research Institute at New York University.
Of course it does not lessen the importance of the end of the secular credit cycle or the seriousness of the economic, financi…
Great Graphic: US Per Capita GDP--the Big Picture Great Graphic: US Per Capita GDP--the Big Picture Reviewed by Marc Chandler on June 14, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

FX: Little Movement, Much to Digest

June 14, 2012
The US dollar continues to sport a soft profile as market position adjustments ahead of the Greek election continues to dominate.  As anticipated, the market has mostly looked beyond Moody's three step downgrade of Spain's creditworthiness to Baa3.  Spanish 10-year yields pushed through 7% briefly, but rumors that ECB officials may have &…
FX: Little Movement, Much to Digest FX: Little Movement, Much to Digest Reviewed by Marc Chandler on June 14, 2012 Rating: 5
Edit

Moody's Joins Party, Slashes Spain's Rating

June 13, 2012
Shortly after the US markets closed, Moody's announced it was slashing Spain's sovereign debt rating three notches to Baa3.  This is one step above junk status.  The euro, which had generally traded higher in North America, was softening going into the close.  The announcement pushed it down further, but it still managed to finish the day…
Moody's Joins Party, Slashes Spain's Rating Moody's Joins Party, Slashes Spain's Rating Reviewed by Marc Chandler on June 13, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Ugly Consolidation/Correction in FX Continues

June 13, 2012
The US dollar is broadly weaker today as the messy consolidation ahead of the Greek election continues.  The market positioning still appears stretched.   The price action seems to be more a result of market positioning and the failure to rebuild the downside momentum in the foreign currencies as last Friday's lows remained intact on the test…
Ugly Consolidation/Correction in FX Continues Ugly Consolidation/Correction in FX Continues Reviewed by Marc Chandler on June 13, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

More Thoughts on Spain and Italy

June 13, 2012
More details of the bank aid to Spain have been proposed. The details seem to show an evolution in the thinking of officials. Spain would be given a considerably longer repayment schedule than the other aid recipients, fifteen years and a five year grace period.  Spain, when it finally asks for the funds, will be charged 3%.  
However, the old …
More Thoughts on Spain and Italy More Thoughts on Spain and Italy Reviewed by Marc Chandler on June 13, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Bloomberg TV: Spain and Italy

June 12, 2012
Here is a short Bloomberg TV interview from June 11. I discuss why the EU offer of aid to Spain is a down payment to what will likely prove to be a larger bill. I also suggested why Italy may come under more pressure.

Bloomberg TV: Spain and Italy Bloomberg TV: Spain and Italy Reviewed by Marc Chandler on June 12, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

US Import Prices and this Week's Data

June 12, 2012
Import prices fell 1.0% in May in line with expectations. The drop can be fully accounted for by food and energy imports. Excluding them, prices were flat. Tomorrow the US reports producer prices and the headline is expected to fall 0.6%. There may be some downside risk to the headline. 
The key point is that headline price pressures are, as …
US Import Prices and this Week's Data US Import Prices and this Week's Data Reviewed by Marc Chandler on June 12, 2012 Rating: 5
Edit

Great Graphic: Italy's GDP Components

June 12, 2012
Here is a Great Graphic from Rebecca Wilder.  Her latest missive is in a similar vein as my note on Italy.While the external sector had helped Italy recover from the 2008 slide, the momentum has faded and has actually been a net drag for the past couple of quarters.  The private domestic economy--consumption and investment, never did recover and …
Great Graphic: Italy's GDP Components Great Graphic: Italy's GDP Components Reviewed by Marc Chandler on June 12, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Euro Pressure Subsides for the Moment

June 12, 2012
After extended yesterday's reversal to $1.2450 in pre-Asian activity, the euro has recover and near midday in London is at making session highs near $1.2525 and initial potential extends toward $1.2560-70 in the North American session.  The pace of yesterday's slide, even for the die hard euro bears, was surprising.   In order to keep the…
Euro Pressure Subsides for the Moment Euro Pressure Subsides for the Moment Reviewed by Marc Chandler on June 12, 2012 Rating: 5
Edit

Why Italy

June 11, 2012
There is a perverse logic unfolding.  Spain is the fourth of the euro zone members to require external assistance.  Cyprus is likely to be next, especially if Russia does not come to its aid as it did last year with a $2.5 bln loan.  
That leaves Italy as the last of southern debtor countries to be standing on its own in the face of the end of a…
Why Italy Why Italy Reviewed by Marc Chandler on June 11, 2012 Rating: 5
Edit

The Implications of Spain's Deal

June 11, 2012
Investors ought not let the recovery in the global capital markets, that has been seen in response to the broad brush strokes of an aid package for Madrid, obscure the fact that the underlying quagmire just got deeper.  The favorable market response is largely technical in nature and related to extreme positioning and the out-sized moves in May.  
…
The Implications of Spain's Deal The Implications of Spain's Deal Reviewed by Marc Chandler on June 11, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

EU/Spain and China Spur Collective Sigh of Relief

June 11, 2012
The US dollar is broadly weaker. However, after being marked down sharply in Asia it is clawing its way back in Europe. Global equities’ sigh of relief to both the EU-Spain aid and China’s slew of data has sparked among the best gains of the year in the MSCI Asia-Pacific Index (+1.8%), though India did not participate (0.25%) and S&P’s warni…
EU/Spain and China Spur Collective Sigh of Relief EU/Spain and China Spur Collective Sigh of Relief Reviewed by Marc Chandler on June 11, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Positioning and FX Technical Outlook: More Correction Ahead

June 09, 2012
The latest CFTC Commitment of Traders report covers the week ending June 5.  We assume that the report's coverage of speculative positioning is  representative of short-term trend followers and momentum players.   There were several noteworthy developments among speculative participants in the futures market.  
The highlights include:
New reco…
Positioning and FX Technical Outlook: More Correction Ahead Positioning and FX Technical Outlook: More Correction Ahead Reviewed by Marc Chandler on June 09, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>
Great Graphic: Queen Elizabeth Great Graphic: Queen Elizabeth Reviewed by magonomics on June 09, 2012 Rating: 5
Edit

Spain's Negotiating Position: Five No's

June 09, 2012
As recently as May 28, Spanish Prime Minister Rajoy was claiming that "there will be no Spanish bank rescue".  He miscalculated.  He had hoped the ECB would come to his rescue.  Not only has the ECB not resumed its sovereign bond purchases, but it did not even throw Spain a bone by cutting rates, which surely is justified based on the t…
Spain's Negotiating Position: Five No's Spain's Negotiating Position: Five No's Reviewed by Marc Chandler on June 09, 2012 Rating: 5
Edit

Great Graphic: Selected Euro Area Credit Ratings

June 08, 2012
Here is another Great Graphic. It comes from Thomson Reuters and it provides a useful table to compare the ratings of the major agencies of several key countries in the euro area.
After this week's move by Fitch on Spain, it leaves Moody's A3 rating as looking out of sync.  What does seem a bit surprising though, is Fitch now rates Spain …
Great Graphic: Selected Euro Area Credit Ratings Great Graphic: Selected Euro Area Credit Ratings Reviewed by Marc Chandler on June 08, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

First Round French Elections: Preliminary Thoughts

June 08, 2012
The first round of the French parliamentary elections will be held Sunday. Although the Greek election on June 17 has received more attention, the French parliamentary election is also important. Since Hollande was elected in mid-May, he has remained in campaign mode to boost his chances of having a parliament that will enact his program.
There a…
First Round French Elections: Preliminary Thoughts First Round French Elections: Preliminary Thoughts Reviewed by Marc Chandler on June 08, 2012 Rating: 5
Edit

Great Graphic: Germany's Target2 Exposure

June 08, 2012
Here is a Great Graphic from ZeroHedge.com that captures the Bundesbank's exposure within the intra-European payments clearing system called Target2.   
When a depositor takes money out a a Spanish bank, for example, and brings it to a German bank, in effect the Bundesbank credits the German bank, but is owed the money by the Spanish central …
Great Graphic: Germany's Target2 Exposure Great Graphic: Germany's Target2 Exposure Reviewed by Marc Chandler on June 08, 2012 Rating: 5
Edit

More Thoughts on Spain-Lite

June 08, 2012
Greece has been the model for Portuguese and Irish aid.  This may or may not have been fair and appropriate.  After all, the nature of the Portuguese and Irish problems were dissimilar from Greece and each other.  Spain's is more like Ireland's.  The key differences include Spain's size, officials have progressed on a learning curve, …
More Thoughts on Spain-Lite More Thoughts on Spain-Lite Reviewed by Marc Chandler on June 08, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Bernanke and Europe Boost Dollar

June 08, 2012
The US dollar has been boosted by expectations that Spain and Cyprus are close to requesting aid and Fed Chairman Bernanke’s reluctance to tip his hand to the US Congress yesterday. This coupled with reports that the euro area finance ministers will hold a conference call over the weekend, following on the heels of French-owned Fitch’s 3-step do…
Bernanke and Europe Boost Dollar Bernanke and Europe Boost Dollar Reviewed by Marc Chandler on June 08, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Thoughts on Japanese and Swiss Reserve Figures

June 07, 2012
Japan and Switzerland released May reserve figures earlier today. They are both noteworthy, but for different reasons. Japanese reserves fell yet the BOJ did not intervene. Switzerland's reserves rose sharply as the SNB had to step up its intervention to defend its franc cap.
Japan's currency reserves fell by about $6.9 bln to $1.278 tr…
Thoughts on Japanese and Swiss Reserve Figures Thoughts on Japanese and Swiss Reserve Figures Reviewed by Marc Chandler on June 07, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

BOE Doesn't Surprise, China Does

June 07, 2012
The BOE lefts rates unchanged and chose not to increase its gilt holdings.  The UK did report a better than expected service PMI today, but there was some thought it would respond to a series of other data that warns that stagnation was morphing into outright contraction.  
Yet China stole some of the thunder.  Just before the BOE announcement, C…
BOE Doesn't Surprise, China Does BOE Doesn't Surprise, China Does Reviewed by Marc Chandler on June 07, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Position Adjusting Continues--Before the BOE

June 07, 2012
The dollar is mostly marginally softer against the major foreign currencies as corrective position adjusting continues.  Many suspect that one way or the other, Spanish banks will get the necessary funds and that some how the government will be able to avoid a full burden of conditionality.  The New York Times  is emphasizing the sheer size of Sp…
Position Adjusting Continues--Before the BOE Position Adjusting Continues--Before the BOE Reviewed by Marc Chandler on June 07, 2012 Rating: 5
Edit

Does the New Jersey Dollar Need to Depreciate?

June 06, 2012
Here is a provocative Great Graphicfrom Joe Weisenthal at Business Insider.  It compares New Jersey and New York GDP performance.  The under-performance of NJ since the Great Recession is noteworthy, but it appears that it began actually earlier. 
While this may be interesting in its own right, it is noteworthy that not a single pundit is callin…
Does the New Jersey Dollar Need to Depreciate? Does the New Jersey Dollar Need to Depreciate? Reviewed by Marc Chandler on June 06, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Count Draghi: Ten Points

June 06, 2012
1. The situation is not as bad as the immediate post-Lehman environment, but "alarmed" by recent market stress.

2. Market concerns are real, but under-estimate the political resolve.

3. Per current treaty, ESM cannot lend directly to banks. If treaties change, not clear if desi…
Count Draghi: Ten Points Count Draghi: Ten Points Reviewed by Marc Chandler on June 06, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

ECB Left Rates Steady, Draghi Keeps Door Open

June 06, 2012
The ECB kept rates on hold, as the consensus had expected.  Draghi's press conference has kept the door open to further action.   The euro has responded by shedding its earlier gains, ostensibly on signs that the ECB does not recognize the sense of urgency.  
Draghi make a couple of minor tweaks in policy.  He confirmed the continuation of fu…
ECB Left Rates Steady, Draghi Keeps Door Open ECB Left Rates Steady, Draghi Keeps Door Open Reviewed by Marc Chandler on June 06, 2012 Rating: 5
Edit

Great Graphic: Int'l Comparison Quality of Life

June 06, 2012
A Great Graphic from the Economist providing an international comparison of a broader measures of the quality of life than GDP figures capture, with some attention to distribution.  These type of composites are more provocative than substantive.   As one might expect, there seems to be a strong correlation between different international comparis…
Great Graphic: Int'l Comparison Quality of Life Great Graphic: Int'l Comparison Quality of Life Reviewed by Marc Chandler on June 06, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Dollar Eases, Australia Surprises, ECB Awaited

June 06, 2012
The US dollar is broadly lower amid less dismal developments and the collective sigh of relief has not only lifted the major foreign currencies, but also equity markets, commodities and peripheral European bond markets.  Some of the momentum has eased as the market now turns its attention to the ECB.  
If the odds of an ECB rate cut were being un…
Dollar Eases, Australia Surprises, ECB Awaited Dollar Eases, Australia Surprises, ECB Awaited Reviewed by Marc Chandler on June 06, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

The State of Confusion and the ECB

June 05, 2012
This time last year the ECB was raising interest rates, though it was still purchasing sovereign bonds in the secondary market.  Under Trichet's leadership, the tight monetary policy reinforced the fiscal austerity during a period of deleveraging.  The seeds of those decisions are still being harvested now.   
The ECB meets a day earlier than…
The State of Confusion and the ECB The State of Confusion and the ECB Reviewed by Marc Chandler on June 05, 2012 Rating: 5
Edit

It is not Just Spanish Banks...

June 05, 2012
There has been great concern about the state of Spain's banks. The Rajoy government has been slow in recognizing the needs of the sector. As recently as Feb, Rajoy was maintaining that no extra funds are needed. Now it continues to resist pressure for it to seek funds from the EFSF. Instead the Rajoy government is seeking to avoid the sti…
It is not Just Spanish Banks... It is not Just Spanish Banks... Reviewed by Marc Chandler on June 05, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>
Atlantic Council Interview: Is the Euro Zone Really In Danger Atlantic Council Interview: Is the Euro Zone Really In Danger Reviewed by magonomics on June 05, 2012 Rating: 5
Edit

Memo of Understanding and other Red Herrings

June 05, 2012
A red herring is a rhetoric ploy to divert attention from the issue at hand by introducing some irrelevant topic. The framing of the Greek election around the memorandum of understanding is such a red herring. There has been such deterioration of the economic conditions in Greece that the conditions and terms of its international assistance wi…
Memo of Understanding and other Red Herrings Memo of Understanding and other Red Herrings Reviewed by Marc Chandler on June 05, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Economic Data Saps Euro Strength

June 05, 2012
The euro correction hit a wall after reaching a five day high in Asia near $1.2540.  The wall was in the form of poor data and the ongoing policy paralysis in Europe.  European officials are acting analog in a digital world.  They are moving to toward something, but it is not for several weeks and their track record does not instill confidence.  
…
Economic Data Saps Euro Strength Economic Data Saps Euro Strength Reviewed by Marc Chandler on June 05, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>
Leaning Green or Hey Baby is that a Prius you're driving? Leaning Green or Hey Baby is that a Prius you're driving? Reviewed by magonomics on June 04, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Quick Note on Today's Price Action

June 04, 2012
The euro briefly poked through the $1.25 level, but has run out of steam.  It completed a 61.8% retracement of the losses since the last correction ran out of steam on May 28th near $1.2625.   On the short-term momentum studies I use for intraday movement, there are bearish divergences emerging.  There is initial potential toward $1.2450.  
That s…
Quick Note on Today's Price Action Quick Note on Today's Price Action Reviewed by Marc Chandler on June 04, 2012 Rating: 5
Edit

Spain and Banking Union

June 04, 2012
Reports suggest that Spain is coming under increasing political pressure to seek assistance. Yet the stigma is too much and Spanish officials recognize that if asks for assistance, many investors will conclude that the country is insolvent and would aggravate the economic and financial pressure it is already facing.
Instead Spain has a two-prong…
Spain and Banking Union Spain and Banking Union Reviewed by Marc Chandler on June 04, 2012 Rating: 5
Edit
Beware The New STD: Sovereign Transmitted Debt Beware The New STD: Sovereign Transmitted Debt Reviewed by Marc Chandler on June 04, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Six Observations to Start the Week

June 04, 2012
The US dollar is little changed against the major foreign currencies and showing a slightly heavier bias against many of the emerging market currencies. The dollar is largely trading within the ranges seen last Friday, with the holiday in the UK (today and tomorrow) sapping some liquidity. Asian equity markets are broadly lower, with the MSCI A…
Six Observations to Start the Week Six Observations to Start the Week Reviewed by Marc Chandler on June 04, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Commitment of Traders Report and Technical Outlook

June 02, 2012
The latest Commitment of Traders report covers the week ending May 29.  Generally speaking non-commercial participants in the futures market were dollar buyers, either by adding to net short foreign currency positions, such as the euro and Australian dollar, or by reducing net long positions, as was the case in sterling and the Canadian dollar.  …
Commitment of Traders Report and Technical Outlook Commitment of Traders Report and Technical Outlook Reviewed by Marc Chandler on June 02, 2012 Rating: 5
Edit

Great Graphic: Bank Exposure to European Debt

June 02, 2012
For those of you who (unlike my brilliant webmaster) are not off to the American Craft Brew Fest today, here is a great [interactive] graphic from Reuters on bank exposure to European Debt. You'll have to click on the link to see it. Happy Saturday!
Great Graphic: Bank Exposure to European Debt Great Graphic: Bank Exposure to European Debt Reviewed by magonomics on June 02, 2012 Rating: 5
Edit

Great Graphic: European PMI Readings

June 01, 2012
Here is a Great Graphic from the Financial Times.  It captures the weakness in the core, as in Germany, France and the Netherlands.  It also underscores the problem Spain faces.  Its PMI was below Greece's.  The prospects for such a weak economy can only make its regional and banking problems more acute.  Ireland is the strongest, but given th…
Great Graphic: European PMI Readings Great Graphic: European PMI Readings Reviewed by Marc Chandler on June 01, 2012 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Dollar Comes Back

June 01, 2012
The US dollar is recovering from the earlier QE and G7 speculation.   The dollar's price action is a bit like a beach ball brought underwater.   Even if I am wrong about QE (that it is unlikely), the fact of the matter is that China, Australia, the ECB and the BOE will respond before the Federal Reserve.  
In addition, while the US employment d…
Dollar Comes Back Dollar Comes Back Reviewed by Marc Chandler on June 01, 2012 Rating: 5
Subscribe to: Posts ( Atom )
Powered by Blogger.